The joys of the German discounters
Aldi and Lidl (obviously).
Aldi and Lidl, the two German discount supermarkets that have slowly but relentlessly taken over Europe and the rest of the world.
Despite their names being recognisable across the globe, they both started out as small German grocery stores, here’s a brief history.
Aldi, the company of two halves yet one name. The company(ies) were founded by the Albrecht brothers who (after serving in World War 2) took over their parents shop but fell out (as business brothers often do) over selling cigarettes.
They split the business (it had grown by then) into North Germany and South Germany. That’s why there are two Aldi logos across the world if you were wondering.
A slightly simpler affair for the Lidl of this world as it was founded by Josef Schwarz and has stayed within the family as part of the highly successful Schwarz-Gruppe.
The name is that of another partner, it was going to be Schwarz Markt but that translates to black market - not the best look…
Both companies moved into the UK in the early ‘90s but Aldi pipped their rival to being the first in England with a store in Birmingham in 1990 compared to Lidl’s arrival in 1994.
Surprisingly, when the German discounters arrived in the UK they were not perceived to be that good. Shoppers felt that the lack of choice with only one brand of each item (an average Aldi/Lidl has around 3000 products to over 40,000 in a normal supermarket) was not good enough. Many of the brands were also German and British household names failed to make an appearance. This meant that the German upstarts failed to make an impression on the British shopper.
Despite the initial cultural differences, Aldi and Lidl slowly began to spread across the UK. They started in the poorer areas of the UK and then began to spread out across the UK, recently reaching more affluent areas such as Stamford.
For me there are two reasons that they have taken a combined 16% share of the UK supermarket sector.
Firstly, the 2008 financial crisis. Since the perhaps of Lehman Brothers, the world went into financial shock and deep recession meaning that many people found themselves poorer than they were before that led them to turning to the cheaper supermarkets.
Those who switched found high quality produce at low prices and many stayed, shocking the more established supermarkets as the did not expect the threat from the Germans and had to adapt and offered cheaper prices.
The second part of their strategy is to shift their reputation to being more ‘British’. A problem both retailers have long suffered is that people still perceive them negatively with many reports that shoppers would put their Aldi/Lidl shopping into Sainsburys or Waitrose bags to conceal where they actually do their shopping for the benefit of the neighbours.
They did this by appearing British and Aldi (in my opinion) have done this better. As soon as you enter an Aldi you are bombarded with Union Jacks and other things that connote Britishness. Banners promote the British produce you can now buy there and to top it off they sponsor the British Olympic effort.
Aldi are not the only ones playing the British card, Lidl are now the official supermarket of the England football team and also plaster their stores with British flags.
Now they have come to nationwide acceptance, the question remains which supermarket is better. I asked this simple question to my Twitter followers and people on an online forum. The results are 8 votes for Lidl and 10 for Aldi.
This makes sense as although everyone I asked does not live in the UK, Aldi (in various forms) are more established worldwide and therefore attract more customers. Herzliche Glückwünsche Aldi!